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Growth in Latin America and the Caribbean: Challenges & Opportunities

SpeakerS:

Alejandra Botero, Manager of Planning and Development Impact, CAF- Development Bank for Latin America and the Caribbean
Andrea Bernal, Anchor, NTN24

With Core Programming Partner

“We developed a multi-year strategy with each of the countries so that 40% of our approvals are green, and we focus on innovative products and instruments to make sure that we have that green transition that happens, but hand in hand with helping, of course, the economic indicators and the social indicators.” Alejandra Botero

Key takeaways:

  • Latin America’s unique advantages: Alejandra Botero detailed how the region possesses significant biodiversity, holding 40% of the world’s biodiversity and a substantial share of green energy resources. Latin America has 60% of the world’s lithium reserves and 40% of its copper production, which are crucial for the global green energy transition.
  • Economic stability and growth potential: Despite global challenges, Latin America enjoys relative macroeconomic stability with independent central banks and fiscal rules. The region can leverage its young population and vast arable land—30% of the world’s future arable land—to stimulate growth.
  • Persistent poverty and inequality: Progress in reducing poverty has stagnated. Currently, one out of four Latin Americans lives in poverty, and the region remains one of the most unequal globally, facing sluggish economic forecasts.
  • Balancing green transition with social investment: Tailoring the green energy transition to each country’s context is essential. While promoting green initiatives, it’s crucial not to neglect social investments. Gas is considered a transitional fuel in this process, recognizing some countries’ reliance on it for exports and energy security.
  • Bridging the digital divide: Technology is a key enabler for addressing poverty and fostering innovation. Investing in digital infrastructure is vital, as 30% of the region lacks digital access, which is essential for education and technological advancement.
  • Addressing security and governance challenges: Regional cooperation is needed to tackle security and governance issues, which are not confined to individual countries but affect the region as a whole. These challenges hinder long-term trust and foreign investment.
  • Importance of cross-sector partnerships: Collaboration among development banks, governments, the private sector, and philanthropy is necessary to address the region’s challenges. Innovative financial instruments can bridge risk gaps and encourage private sector investment in sustainable projects.

Action items:

  • Leverage natural resources sustainably: Utilize the abundant biodiversity, lithium, and copper resources to drive sustainable growth and contribute to the global green energy transition, ensuring environmental protection.
  • Implement inclusive economic policies: Develop strategies focused on reducing poverty and inequality by promoting inclusive growth and targeting social programs to support the most vulnerable populations.
  • Customize green transition strategies: Create country-specific green transition plans that consider each nation’s unique circumstances, balancing environmental goals with social and economic needs. Acknowledge the role of gas as a transitional energy source where applicable.
  • Invest in digital infrastructure and education: Prioritize investments in digital technologies to bridge the digital divide, which is essential for education, innovation, and addressing poverty.
  • Enhance regional security cooperation: Strengthen partnerships among countries to address security and governance issues collectively, fostering a stable environment for investment and growth.
  • Foster multi sector partnerships: Encourage collaboration between public institutions, development banks, the private sector, and philanthropic organizations to develop innovative financial instruments and share investment risks.
  • Encourage private sector engagement: Actively involve the private sector in regional development initiatives, recognizing its critical role in driving economic growth and implementing sustainable development projects.

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